Nasdaq Futures Drop 2.6% After Amazon and Intel Report Poor Earnings
Investors reacted negatively to disappointing earnings from Amazon and Intel, causing Nasdaq futures to drop significantly.
Nasdaq futures fell by 2.6% on Friday following disappointing earnings reports from Amazon and Intel, signaling continued investor unease about technology stocks.
Amazon’s shares dropped about 6% in premarket trading after the company revealed third-quarter earnings and revenue that did not meet market expectations. The tech giant also reported a negative free cash flow of $42.4 billion.
Intel experienced a more dramatic plunge, slipping nearly 25% as it announced a weak outlook for the fourth quarter, attributing the decline to weaknesses in the PC market and manufacturing issues. Its revenue from the client computing sector fell 5% year-over-year.
In contrast to the downturn in technology shares, the Dow Jones Industrial Average futures were slightly higher, reflecting a shift by investors towards more defensive sectors like healthcare and consumer staples. Procter & Gamble and Coca-Cola both saw gains of approximately 2%.
Paul Stanley, managing director at Arca, noted, “The AI trade is down, but not out,” suggesting that the current challenges may be part of a broader cycle of corrections in technology investments.
Investors remained apprehensive about the financial viability of the current AI spending spree. Concerns intensified after Alphabet’s shares fell 12%, resulting in a substantial loss of market value. The declines across these major tech firms have raised questions regarding their capacity to generate returns from hefty investments in artificial intelligence.
The market’s focus has shifted significantly as the end of October approaches, with Nasdaq Composite expected to record a 2.5% loss for the month amidst ongoing scrutiny of spending trends in the AI sector. In Asia, major indexes also faced declines, with Japan’s Nikkei 225 dropping 2.12% and South Korea’s Kospi falling 3.48%. In contrast, Australia’s S&P/ASX 200 saw a slight increase of 0.18%.
Sources
Bhupendra Singh Chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur Kiran, his insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.